Woolworths : Annual Report (print friendly)

are Woolworths Group

2022

Annual Report

Woolworths Group Limited

ABN 88 000 014 675

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Contents

SECTION 1

Performance highlights

F22 highlights	2
How we create value	4
Sustainability highlights	6
Our strategic priorities	8
Chair's report	14
CEO's report	16
Group financial performance	18
SECTION 2
Business review
Australian Food	26
WooliesX	30
Australian B2B	34
New Zealand Food	36
BIG W	40
Our material risks	44
Understanding our climate risk	50
SECTION 3
Directors' Report
Governance	58
Board skills and experience	59
Board of directors	60
Group Executive Committee	63
Directors' Statutory Report	68
Remuneration Report	70
SECTION 4
Financial Report
Auditor's Independence Declaration	94
Financial Report	95
Directors' Declaration	167
Independent Auditor's Report	168
SECTION 5
Other information
Shareholder information	172
Corporate Governance Statement	173
Glossary	175
Company directory	177

Acknowledgement of Country

Woolworths Group acknowledges the Traditional Custodians of Country throughout Australia and recognises their continuing connection to land, waters and community. We pay our respects to them and their cultures; and to Elders both past and present.

Aboriginal and Torres Strait Islander people should be aware that this report may contain the names and images of deceased persons.

Sustainability highlights

In F22 we made pleasing progress against our Sustainability Plan 2025, however we recognise there's still more to do. Learn more about our sustainability highlights.

• Page 6

Chair and CEO reports

Read about our Chair and CEO's reflections on F22.

• Chair's report page 14
• CEO's report page 16

Cover story

This image was taken at the Gabuda-Gordonvale Woolworths store opening in Cairns, Qld in July 2022. The opening was celebrated with our team and the local community, including local Indigenous Elders.

Progress against strategic priorities

Read about our progress on our F22 strategic priorities to transform into a more focused Food and Everyday Needs Ecosystem.

• Page 8

Group financial performance

Find out more about the Group's financial performance in F22.

• Page 18

Understanding our climate risk

In F22 we continued to focus on understanding our climate risk, which is detailed in this report.

• Page 50

We are

Woolworths Group

It all starts with 'we'.

We are a team of over 190,000. We are more than just a collection of businesses but rather a diverse group of people with a range of experience. We know the actions we take today, together with our partners, are opportunities to have a positive impact on

the future generations to come.

Join us as we create better experiences together for a better tomorrow.

Welcome to our

2022 Annual Report.

1

WoolworthsAnnual

Group2022 Report

1 highlightsPerformance 2 reviewBusiness

3

Directors' Report

4

Financial Report

5

Other information

2

F22 highlights

	22.7	Team	Average			49	Total
Our reach	M
members	weekly	stores 3
served on average	197,773	Group digital traffic 1	of Customer
	Customers		19.4M	Group Voice	1,451
	per week		NPS (June 2022)

Group sales

1

F22

$60,849M

Group

H2 Group EBIT 4

Group EBIT 4

Financial

$

60.8B

$

$

$

$53,080M

F20

M

M

M

F19

$49,723M

F21

$55,733M

 9.2% from F21

F18

$47,088M

 39% from F21

 8.1% from H2 F21

 2.7% from F21

Group sales by business

Group NPAT 5

ROFE 6

Dividend per share

 Australian B2B

$3,963M

$1,514M

13.7%

92₵

 Australian Food

$45,461M

 New Zealand Food (AUD)

$7,092M

 0.7% from F21

 3.1 pts from F21

 1.1% from F21 7

 BIG W

$4,431M

	community	>10,000t	11.13	M	% CO2
Sustainability	Direct			50	31
contribution	of virgin plastic packaging	Group Total
	$41.4M	meals donated	reduction in scope
	removed from circulation	Recordable Injury	to OzHarvest	1 & 2 emissions
	compared to F18 baseline 2	Frequency Rate	since 2014	from 2015 baseline

1 Continuing operations.	3	Includes Woolworths Supermarkets,	6	Normalised ROFE for continuing operations before
2 Woolworths Supermarkets and Metro Food Stores only.		Metro Food Stores, Countdown and BIG W.		significant items.
	4	Continuing operations before significant items.	7	Total dividend per share - excluding Endeavour Group in F21.
	5	Continuing operations before significant
		items attributable to equity holders of the
		parent entity.

3

WoolworthsAnnual

Group2022 Report

1 highlightsPerformance 2 reviewBusiness

3

Directors' Report

4

Financial Report

5

Other information

4

How we create value

	5
and the broader community by being purpose-led to	GroupWoolworths 2022ReportAnnual
As a Group, we are focused on creating sustainable long-term
value for our customers, team members, shareholders, suppliers
create better experiences together for a better tomorrow.

Our value drivers

Customer services

Connecting customers with good food and more everyday through convenient stores, services, seamless digital experiences and a leading loyalty program

Team

A diverse and inclusive team which reflects the diversity of the communities in which we operate

Trusted brands and products

Providing the best range and value, freshest produce and everyday needs for our customers in Australia and New Zealand

Our business activities

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	g	e	t	h
				B2C Food
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o							Stores eCommerce Products
W

Digital	Supply &	Network &
& data	fulfil	property

More Everyday

Services Needs Rewards

B2B	International Wholesale	w

Value created

Customer

49				22.7M
Group Voice of	customers
Customer NPS	served on
(June 2022)	average per week
Team
15				WGEA
Group Voice of Team	Employer of
(overall F22 score)	Choice
Suppliers
55				52
suppliers across six	Voice of Supplier
priority categories	(June 2022)
engaged in scope 3
emissions program
Community
$41.4M	50M

1 highlightsPerformance 2 reviewBusiness

3

Directors' Report

4

Financial Report

Retail platforms	Retail
analytics enabled platforms delivering
Platforms
Leading technology, digital and
value for the Group and our partners

Financial

Strong balance sheet and disciplined capital allocation to drive sustainable growth and shareholder value

								o
B2B Food								r
							r
						o	m	o
				r	t
			e
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	b
a
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.
.

direct community	meals donated to
contribution	OzHarvest since 2014
Shareholders
$1,514M	92¢
Group NPAT1 attributable	F22 dividend
to equity holders	per share
of the parent entity

• Continuing operations before significant items.

5

Other information

6

SUSTAINABILITY HIGHLIGHTS

A better tomorrow

Planet Product

7

WoolworthsAnnual

Group2022 Report

Our commitment to sustainability is intrinsic to our business and the way we operate, helping us make positive change and underpinning sustainable growth for the future.

Our Sustainability Plan 2025

Our 2025 sustainability ambitions are focused on transforming the way we operate so the future is better for our customers, our communities, our team and the planet. Over the last year, we have made progress across each pillar of our 2025 plan. However, we know there is still more to do to meet our ambitions.

More details on our progress will be outlined in our

2022 Sustainability Report which will be released in September

We continue to adapt our business to manage the impacts of climate change. We are working to reduce emissions from our own operations through green electricity and electric vehicle trials. In F22 we moved beyond our own operations and established a program to allow Woolworths Group to understand our suppliers' capability on emissions reductions, identify leaders, and track improvements over time.

For more information on our strategic approach to climate change, refer to pages 50 to 57.

F22 has been a year of significant milestones for our food rescue partnerships. Together with OzHarvest, we have now provided over 50 million meals to Australians in need. Through our partnership with WIRES, we have provided 150 Australian wildlife rescue agencies with food grants. Currently, around 70% of Woolworths Supermarkets have a food waste recycling

We are working to make our packaging as sustainable as possible by phasing out problematic packaging. In F22 we enhanced our data capabilities and worked to build our product level master data for our own brand packaging by engaging an external expert. This has enabled greater clarity of our performance against our ambitions. In F22 we completed 15 packaging redesign projects which will convert non-recyclable materials to recyclable, and reduce virgin plastic in packaging by 4,262 tonnes annually.

Pleasingly, we were ranked Australia's Healthiest Supermarket Own Brand range by The George Institute for the third consecutive year. We

are committed to making healthier easier for our customers by making healthier choices more accessible and reformulating our own brand products. At the end of F22, 76% of eligible Woolworths own brand products met

1 highlightsPerformance 2 review

People

As one of Australia and New Zealand's largest private sector employers, we are committed to being a truly inclusive and diverse workplace. Our inclusion strategy consists of five pillars - gender equity, LGBTQ+, First Nations, accessibility and cultural diversity.

In F22, we achieved 39% representation of women in our senior leadership team and maintained our Gold Tier status in the Australian Workplace Equality Index (AWEI) for the fourth consecutive year. We continue to create hands-on learning experiences for students and job candidates living with disability through our Mini Woolies program, and aim to do more to progress our accessibility agenda in the coming years.

We recognise the need to do more to listen and learn in regard to our commitment to reconciliation. In F22 we developed our reconciliation strategy and established our First Nations Advisory Board. The Advisory Board provides guidance for the Group on issues and challenges of importance to Indigenous team members, customers and communities across Australia.

Our Human Rights Program has been in place for five years and underpins the work we do to build a rights-respecting culture. Throughout F22, we continued to embed human rights due diligence by:

• Developing a labour governance framework to monitor third-party labour risks at our sites
• Developing and publishing a Sustainable Cotton Policy and an Addendum to our Responsible Sourcing Standards on Responsible Recruitment
• Strengthening our commitment to partnerships by signing a memorandum of understanding with the Retail Supply Chain Alliance and joining the Consumer Goods Forum Human Rights Coalition

11.13

Total recordable injury frequency rate (TRIFR):

• 9% from F21

$41.4M

Direct community contributions

Gold Tier

AWEI

status achieved in 2021

solution in place to recycle food waste not suitable for consumption. We recognise there is more to do to extend this across the network.

Nature and biodiversity is at the forefront of environmental risk. We developed our nurturing nature strategy this year, focused on leading the future of protein and working with our partners to promote regenerative agricultural practices and improve our responsible stewardship

of natural resources. Our membership of the Taskforce for Nature-related Financial Disclosures Forum will inform our consideration of nature and biodiversity-related risk in our supply chain to help us take a holistic approach to our decision making.

100% green electricity in South Australia from July 2022

31% reduction in scope 1 & 2 emissions below 2015 baseline

50M meals donated to OzHarvest since 2014

the Australian Government's Healthy Food Partnership targets for salt, sugar and saturated fat with the aim of achieving 100% by 2025.

This year, we launched our seafood sourcing policy to embed human rights, animal welfare and sustainable seafood sourcing requirements. As a result, all our remaining Woolworths own brand seafood products have been transitioned to ecologically responsible sources. We are also participating in the Tasmanian Government's consultations on the 10-Year Salmon Plan, and support its aim of ensuring world's best practice. We will continue to work with government, industry and community stakeholders constructively to help implement actions that underpin

a sustainable salmon industry.

>10,000t of virgin plastic packaging reduction compared to F18 baseline 1

Australia's Healthiest

Supermarket Own

Brands (3 years in a row) 2

100% all own brand whole shell eggs cage free

Business

3

Directors' Report

4

Financial Report

5

Other information

Further information will be released in our Modern Slavery Statement in September

• Woolworths Supermarkets and Metro Food stores only.
  2 The George Institute for Global Health's FoodSwitch:
  State of the Food Supply report (2019, 2020, 2021).